Trust and Honesty

America's Business Culture at a Crossroad

Tamar Frankel

America's culture is moving in a new and dangerous direction, as it becomes more accepting and tolerant of dishonesty and financial abuse. Tamar Frankel argues that this phenomenon is not new; in fact it has a specific traceable past. During the past thirty years temptations and opportunities to defraud have risen; legal, moral and theoretical barriers to abuse of trust have fallen. She goes on to suggest that fraud and the abuse of trust could have a widespread impact on American economy and prosperity, and argues that the way to counter this disturbing trend is to reverse the culture of business dishonesty. Finally, she presents the following thesis: If Americans have had enough of financial abuse, they can demand of their leaders, of themselves, and of each other more honesty and trust and less cynicism. Americans can reject the actions, attitudes, theories and assumptions that brought us the corporate scandals of the 1990s. Though American society can have "bad apples," and its constituents hold differing opinions about the precise meaning of trust and truth, it can remain honest, as long as it aspires to honesty.

Trust and Honesty

America's Business Culture at a Crossroad

Tamar Frankel

Description

America's culture is moving in a new and dangerous direction, as it becomes more accepting and tolerant of dishonesty and financial abuse. Tamar Frankel argues that this phenomenon is not new; in fact it has a specific traceable past. During the past thirty years temptations and opportunities to defraud have risen; legal, moral and theoretical barriers to abuse of trust have fallen. She goes on to suggest that fraud and the abuse of trust could have a widespread impact on American economy and prosperity, and argues that the way to counter this disturbing trend is to reverse the culture of business dishonesty. Finally, she presents the following thesis: If Americans have had enough of financial abuse, they can demand of their leaders, of themselves, and of each other more honesty and trust and less cynicism. Americans can reject the actions, attitudes, theories and assumptions that brought us the corporate scandals of the 1990s. Though American society can have "bad apples," and its constituents hold differing opinions about the precise meaning of trust and truth, it can remain honest, as long as it aspires to honesty.

Trust and Honesty

America's Business Culture at a Crossroad

Tamar Frankel

Table of Contents

Part I: The Eroding Trust, Truth, and Culture of Honesty1. The Spreading Abuse of Trust and Deception2. Old and New Concerns3. Towards Abuse of Trust and Mistrust4. Towards Deception5. Towards a Different American CulturePart II: Rising Opportunities and Temptations and Falling Barriers to Abuse of Trust and Deception6. Rising Opportunities and Temptations7. Falling Barriers to Abuse of Trust and Deception: The Shift to Weaker Morality, Weaker Law and Stronger Market Discipline8. Falling Barriers to Abuse of Trust and Deception: The Hidden Changes in Legal Doctrine and Interpretation9. The Shift from Professions to Businesses10. In Markets We Trust11. Why Did Legal Enforcement Fail to Stem the Avalanche of Fraud?12. Towards an Honest Society

Trust and Honesty

America's Business Culture at a Crossroad

Tamar Frankel

Author Information

Tamar Frankel is Professor of Law at Boston University. She is also the author of Securitization: Structured Financing, Financial Assets Pools, and Asset-Backed Securities (1991) and co-author of The Regulation of Money Managers (2001), and Investment Management Regulation (2003).

Trust and Honesty

America's Business Culture at a Crossroad

Tamar Frankel

Reviews and Awards

"Tamar Frankel sounds a warning that America's commitment to minimal standards of good faith in business dealing is being progressively eroded, with Enron and World Com being only the tip of a very large iceberg. Disturbingly this corruption has been tolerated or even justified by decision-makers and opinion formers. Frankel provides a diamond-clear analysis, drawing on a deep knowledge of law, business, ethics, philosophy, sociology, and economic theory. She has produced a compelling case for American business, law and economics to make an account of the soul and repent."--Dr. Joshua Getzler, Fellow and Lecturer, Faculty of Law, Oxford University

"Tamar Frankel has written a brilliant analysis of the ethical deterioration of corporate America and sets forth a practical way of redirecting our misguided culture. This immensely readable book pulls no punches in calling for a mass movement towards an 'honest society which will reap the rewards of honesty.'"--Arthur Levitt, Former Chairman, United States Securities and Exchange Commission

"Tamar Frankel's book, Trust and Honesty: America's Culture at a Cross Road, is a provocative and broad-sweeping assessment of American culture, especially business culture. Weaving together press stories, observations, and research from economics, law, psychology, and sociology, Frankel draws a disturbing conclusion: Those in positions in trust are less trustworthy and our society is weakened by this trend."--Peter Tufano, Sylvan C. Coleman Professor of Financial Management, Harvard Business School

"In this timely and thought-provoking book, Tamar Frankel points out the important role that social norms and attitudes play in good corporate governance. What makes a society dishonest, Frankel argues forcefully, is not merely fraud but a general acceptance of fraud; when market participants begin to assume that others will cut corners whenever they can get away with it, the trust needed for economic prosperity will be undermined. A well functioning corporate system, Frankel suggests, is not merely the presence of good legal rules but also general aspirations to honesty. The book makes the reader stop and think, and no one who reads it will fail to recognize the importance of the issues it raises."--Lucian Bebchuk, Harvard Law School

"A valuable contemporary contribution to longstanding inquiry about the optimal mix of markets and oversight in economic life; Tamar Frankel offers fresh perspectives emphasizing the role of honesty in the analysis."-Lawrence A. Cunningham, Boston College Law School